 |
| What does the market index mean? |
Would start with the example for example, for Bombay stock exchange, the market indexes sense, Sensex shows some of the companies that are representing
The whole market some of the top companies so, it has a list of 30 approx. companies the watcher which is huge through market capitalization and those are represented as a sample of the market movements.
How if these companies would be performing well, it is assumed that the whole market is performing well.
This is how the market index came into the picture because it tracks the packet movement and it shows the price fluctuation of the shares which are chosen as a representative sample to indicate the whole market performance.
Now, most leading indices are weighted by market capitalization to take into account the fact that more than several shares issued greater the number of portfolios in which they may be held.
Most of the indices which are representative of the shares listed on it are weighted by market cap. As I said, for example,
The Sensex shows a listing of 30 companies that are topped by their market capitalization in different sectors as well. We can depend on a single sector. The whole represents companies
From different sectors that are performing well and are having the largest market cap the market cap is your outstanding shares plus the share that into share value.
That would be the total market cap. More outstanding shares out there in the market and the share value would give a better picture of the company’s performance in the market
And its perception by the investors those are included in most of the leading entices stocks included in an index are also quite liquid making it possible for investors to replicate the index at a low cost.
Also, this is taken into consideration that when the index is formed, in that inverted index the stocks which are listed should be liquid here means the transaction in those stocks happen, happen at
At a higher pace, those stocks are more in demand and that’s the buying and selling of the shares related to companies
That happens at a higher pace in the market and thus those stocks are liquid and those stocks are included in the index as a reference they as a representative.
Even if the investor wants to replicate the index it would be possible for them to replicate it at a low cost. Narrow entices are usually made up of the most actively traded equity shares in that exchange.
As I said, if you are considering a narrow and diocese so there are also indexes like bank nifty so these are those are only showing the companies that are related to
The banking sector and that are most actively traded in equity shares in that exchange. If we talk about
The more nervous index those are more specific so they would be including the most actively traded equity because that would be represented representing them.
Market the most buy and sell for those transactions that happen on a day to day basis. Thought the market is they just had surgery.
Several users and data are widely reported in the news issue of the press and electronic insulin media and those fields’ data on the market at the moment are easily available to them.
Public so when we do talk about the share market. What we see we talk about index wear leather the index has gone up or gone down.
In the case of the national stock exchange the representative indexes nifty in the case of the Bombay stock exchange, the representative market index, its Sensex.
We usually look at getting Sensex or nifty to get an idea about how the shares are performing what is the market movement.
It is going up or down, what are the fluctuations happening? And that is what as reported in most of the financial media electronic information,
Media and real-time, data giving the share prices formation of the company these lists are included.
Those market index the index values a leading indicator of the overall cost maker sector comments and effectively capture the state of the financial market point of time as I already mentioned it
Shows the performance of the economy or sector performance and it to the financial market at a public point of time a representative index
As performance benchmark returns on equity mutual are they in Richmond records often compared with
The returns on a market index are usually taken as bad to mark so I have built my portfolio including some of the stocks.
I would like to compare whether my portfolio is performing well as compared to the index or is it performing low can replicate the index I could include the same number of stocks as they’re in
The index and then I could try to observe that. Whether my portfolio performances are the level that the index is giving all isn’t below that.
Also used as a benchmark and most of the mutual find out mutual fund managers and the in the investors, they try to analyze they try to benchmark their portfolio with index
